Presentation on theme: "Water Pollution Control Authority. Regionalization. Bridgeport. Monroe"— Presentation transcript:
1Water Pollution Control Authority. Regionalization. Bridgeport. Monroe Water Pollution Control Authority Regionalization Bridgeport Monroe Trumbull Glenn A. Santoro, Esq. Robinson & Cole LLP 280 Trumbull Street Hartford, CT (860)
2Today’s Topics What is a Regionalization Transaction Benefits of RegionalizationChallenges of RegionalizationCase Study – Greater New Haven Water Pollution Control Authority
3What is a Regionalization Transaction? Statutory basis to create a regional water pollution control authority (the “Authority”):Sections 22a-500 to 22a-519, inclusive, of the Connecticut General Statutes (the “Act”)How is the Authority formed?The legislative bodies of two or more municipalities adopt a concurrent ordinance to create a regional water pollution control authorityThe municipalities do not need to be contiguous
4What is a Regionalization Transaction? Requirements for the concurrent ordinance:Name of the AuthorityAddress of the Authority’s principal officeA statement that the Authority is created pursuant to the Act
5What is a Regionalization Transaction? Requirements for the concurrent ordinance (cont’d):Information regarding the Authority’s directors:The number, names, addresses, and terms of office of the first directorsProvisions for director compensation, if anyNumber of votes to be cast by each directorMethod for appointment and removal of directors
6What is a Regionalization Transaction? Approval by the State of Connecticut:The constituent municipalities must prepare and submit a preliminary plan of operation for the Authority to the Commissioner of Environmental Protection and the State Treasurer for review and approvalThe Commissioner of Environmental Protection will review the preliminary plan of operation, and after consultation with the Secretary of the Office of Policy and Management, may approve such plan if it is in the furtherance of the environmental protection laws of the State.
7What is a Regionalization Transaction? What is typically included in the preliminary plan of operation submitted for State approval?Description of wastewater system assets to be transferredDescription of the Authority’s organization and managementFinancing plan and bonding requirementsEstimated budget and rates
8What is a Regionalization Transaction? The Authority is officially formed once:All of the constituent municipalities have adopted the concurrent ordinance; andThe State has approved the Authority’s preliminary plan of operation.
9Benefits of Regionalization The Authority is a separate legal entityGoverned by its own board of directors and officersHas the ability to:Issue bondsPurchase wastewater system assetsImpose fees, rates, charges and penalties and levy assessments on property benefited by the wastewater system
10Benefits of Regionalization Governance of the Authority:Board of Directors – each constituent municipality will have the right to elect one or more directors to the boardThe Authority will also have a chairman of the board, to preside over board meetingsThe initial chairman should be identified in the concurrent ordinance
11Benefits of Regionalization Governance of the Authority (cont’d):Board of Directors will elect officers of the Authority, which typically includes an Executive Director, Secretary and TreasurerBoard of Directors will adopt bylawsThe bylaws will govern the administration of the Authority’s property and the conduct of its affairs.
12Benefits of Regionalization Purchase Wastewater System AssetsThe Authority can use the proceeds from the bond issuance to purchase the wastewater system assets of each constituent municipalityThe bonds can be secured by a pledge of the Authority’s revenueEach constituent municipality can deposit the proceeds of the purchase price received from the Authority in:The general fund of the municipality, to be used for any lawful municipal purposeA rate stabilization fund for the benefit of that municipality’s users of the regional wastewater system
13Benefits of Regionalization Additional Benefits:The Authority can assume all sewer-related obligations and sewer-related debt of the constituent municipalitiesImproves the balance sheets of the constituent municipalities by decreasing liabilitiesAuthority considered a “municipality” for purposes of receiving grants and loans under the Clean Water Fund Program (Conn. Gen. Stat. Section 22a-517(b))The Authority may be provided higher “priority” for receipt of funding under the Clean Water Fund ProgramReduced administrative costs for constituent municipalities and economies of scaleMore effective and broad based protection of the environment
14Benefits of Regionalization Additional Benefits (cont’d):Strategic planning on a regional basisPossible arrangements for PILOT payments (payments in lieu of taxes) by the Authority to the constituent municipalitiesSewer expansion must first be approved at the local level, so the Authority cannot expand without local approvalPossible State budget proposal for Fiscal Year that could provide up to $40 million in grants to encourage regionalization among municipalities and $10 million for purchases of heavy equipment
15Benefits of Regionalization Details of the Potential Jewish Home for the Elderly Project:Monroe constructs the Jewish Home, receives economic stimulus, and has access to the sewerage systemBridgeport and Trumbull share revenues on access to the sewerage system
16Challenges of Regionalization General Timeline of Action Items (9 to 12 months):Adoption of concurrent ordinancesState approval of preliminary plan of operationAppointment of directors and officers and adoption of bylawsAdoption of a budget, rates and sewer ordinance, and holding of requisite public hearingsInitial budget must be approved by the Secretary of the Office of Policy and Management
17Challenges of Regionalization General Timeline of Action Items (9 to 12 months) cont’d:Draft and negotiate asset purchase agreement and ancillary documentsDraft and negotiate bond issuance documentsMeet with rating agencies to obtain a rating for the Authority (Standard & Poor’s, Moody’s and Fitch)Current economic environment will be a challenge
18Challenges of Regionalization Establishing User Rates:Prior to commencing operations, the Authority will need to establish user ratesNo changes may be made to the user rates without at least 60 days prior notice to the users and a public hearing
19Challenges of Regionalization Establishing User Rates (cont’d):The user rates must be established so that the Authority has sufficient funds each year, with other revenues (if any), to do the followingPay the cost of maintaining, repairing and operating its wastewater system;Pay the principal and interest on outstanding bonds;Meet any requirements of any resolutions authorizing, or trust indenture securing, outstanding bonds or notes of the Authority;Make any agreed upon payments in lieu of taxes to municipalities in which the Authority has property; andPay all other reasonable and necessary expenses of the Authority.
20Challenges of Regionalization Additional Considerations:Each municipality will not have the same control over the wastewater system as before regionalizationThe Authority will be governed by a separate board of directors, and each town may have only one or two appointees on the boardRates adopted by the Authority may be different than the rates currently charged by each municipalityMunicipal revenue sharing proposals can be included as part of the regionalization transaction by including specific covenants in the asset purchase agreement
21Case Study – GNHWPCA Gabriel Varca – Treasurer Greater New Haven Water Pollution Control Authority (“GNHWPCA”)Formed in July 2005 pursuant to the ActConstituent Municipalities: New Haven, East Haven, Hamden and WoodbridgeGNHWPCA was created to operate the wastewater systems of the constituent municipalities, including the treatment plant located at 345 East Shore Parkway, New Haven
22Case Study – GNHWPCA Governing Body of the GNHWPCA Nine member board of directorsFour directors appointed by New HavenTwo directors appointed by East HavenTwo directors appointed by HamdenOne director appointed by WoodbridgeDirectors serve for three year terms, which are staggeredDirectors are divided into three groups of threeBoard elects a chairman, who serves for a one year termNo individual may serve more than two consecutive terms as chairman
23Case Study – GNHWPCA User Rates (user fee per ccf) – GNHWPCA User rates of each municipality prior to regionalization -fiscal year ending June 30, 2006:New Haven: $1.36Hamden: $2.20East Haven: $1.95Woodbridge: $2.70User rates of the GNHWPCA following regionalization:FY2006: $1.84FY2007: $2.14FY2008: $2.31FY2009: $2.45
24Wrap-Up Topics we discussed today: What is a Regionalization TransactionBenefits of RegionalizationChallenges of RegionalizationCase Study – Greater New Haven Water Pollution Control Authority